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LATEST NEWS UPDATES | The long wait of Indian farmers for a better remuneration deal -Himanshu

The long wait of Indian farmers for a better remuneration deal -Himanshu

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published Published on Jun 5, 2020   modified Modified on Jun 6, 2020

-Livemint.com

The ongoing reforms won’t help if they remain deprived of market access and suffer low demand

Earlier this week, as part of the package for Aatmanirbhar Bharat, the Cabinet approved the proposals for agricultural marketing reforms announced in May by finance minister Nirmala Sitharaman. The government has approved the The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, along with amendments to the Essential Commodities Act. It has also okayed an ordinance to promote contract farming. The purpose of these is to grant farmers greater choice in accessing markets, encourage investment in storage infrastructure and allow greater flexibility for contract farming. It is expected that these will free farmers from various regulations and let them realize better prices through a market mechanism. These moves are part of reforms pushed by successive government since 2003, including the National Democratic Alliance dispensation, which proposed a model Agricultural Produce Marketing Committee (APMC) Act in 2017 and a Contract Farming Act in 2018.

The issue isn’t whether these reforms are necessary, but whether they’re sufficient to raise farmers’ price realization on their produce. Part of the reason such ideas have not found favour with state governments or have not helped farmers so far is the complexity of agricultural markets. Uniquely, these are characterised by vast heterogeneity, not just in terms of the regional spread and practices, but also the variety of products. The prices farmers get is not just determined by their access to markets, but also by domestic demand and supply along with international rates. An assumption that inefficient markets are the only or primary reason for farmers earning too little would be faulty.

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Livemint.com, 5 June, 2020, https://www.livemint.com/opinion/columns/the-long-wait-of-indian-farmers-for-a-better-remuneration-deal-11591287774919.html


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